Possessions after Bankruptcy: Surprising List of Items You Can Keep and Lose in Wisconsin Bankruptcy
Bankruptcy can be a daunting prospect, especially when it comes to concerns about losing your property and assets. However, in Wisconsin, there are important laws and exemptions that protect much of what you own. This guide will help you gain clarity on what you can keep after filing for bankruptcy in Wisconsin.
Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common option for individuals drowning in debt. It’s often referred to as “liquidation” bankruptcy because it involves selling a portion of your assets to pay off your debts. This can sound alarming, but it’s crucial to know that bankruptcy laws provide exemptions that safeguard many of your possessions.
Possessions after Bankruptcy: Protecting Your Home and Car
One of the primary concerns for bankruptcy filers is the fate of their home and car. Fortunately, Wisconsin’s bankruptcy exemptions offer crucial protection:
Homestead Exemption: If you’re an individual homeowner, you can protect up to $75,000 in home equity, and for married homeowners filing jointly, this increases to $150,000. This means that, in most cases, your primary residence is safe from liquidation.
Motor Vehicles: Bankruptcy exemptions apply to your car as well. While there may be equity limitations, these exemptions ensure that you can keep your vehicle in many situations.
Possessions after Bankruptcy: Other Property Exemptions to Consider
Beyond your home and car, both state and federal bankruptcy laws provide exemptions for various types of property and assets. These exemptions for keeping possessions after bankruptcy may include:
- Personal property
- Retirement accounts
- Wrongful and personal injury death recovery
Additionally, Wisconsin state law offers exemptions for keeping possessions after bankruptcy:
- Bank deposits
- Pension and retirement benefits
- Workers’ compensation
- Unemployment compensation
- Veterans’ benefits
These exemptions are essential in ensuring that you don’t lose all of your possessions after bankruptcy when filing for bankruptcy. They allow you to protect a significant portion of your assets, providing a fresh start while retaining many of your possessions.
Possessions after Bankruptcy: The Myth of Losing Everything
One common misconception is that bankruptcy requires you to forfeit all your assets and start anew. As illustrated above, this is far from the truth. Bankruptcy offers you a second chance while allowing you to maintain ownership of many essential items.
So, while bankruptcy might seem overwhelming, it does not mean the loss of everything you’ve worked for. By understanding the exemptions available in Wisconsin and federal law, you can navigate the bankruptcy process with greater confidence.
Frequently Asked Questions About Possessions after Bankruptcy
Q1. What happens to my home and car in bankruptcy? In most cases, you won’t lose your home or car in bankruptcy if the equity in the property is fully exempt. Even if your property isn’t entirely exempt, you can typically keep it by paying its non-exempt value to creditors in Chapter 13 bankruptcy.
Q2. What if a creditor has a “security interest” in my property? If a creditor has a security interest, such as a mortgage on your home, bankruptcy won’t automatically remove it. To keep the property, you can either continue making payments on the debt or pay the creditor the property’s worth. In some cases, if there’s creditor misconduct, you may challenge the debt.
Q3. Can I own anything after bankruptcy? Yes, you can. Bankruptcy doesn’t mean you can’t own anything. You can keep your exempt property and anything you obtain after filing. However, any inheritance, property settlement, or life insurance benefits received within 180 days after bankruptcy may have to be used to repay creditors unless they are exempt. You can also retain property covered by Wisconsin bankruptcy exemptions.
Contact Dahlberg Law Group for Guidance for Possessions after Bankruptcy
Bankruptcy can be a complex process, but it doesn’t have to mean losing everything you own. With the right legal guidance and a thorough understanding of exemptions, you can protect your possessions while gaining a fresh financial start.
If you’re facing bankruptcy in Wisconsin and need expert advice, reach out to Dahlberg Law Group. Our experienced attorneys, including Attorney Steve Eichsteadt, can provide the assistance and support you need. Contact us today for a consultation and take the first step toward a debt-free future.